Health Reform Task Force Bogs Down On DHS Contract

DHS Director John Selig (with his back to the camera) talking with members of a task force Thursday at the Capitol.

Credit Roby Brock / Talk Business & Politics

Members of a task force looking at health reforms in Arkansas took a detour down a philosophical road regarding contract management at the Department of Human Services in a discussion that lasted more than an hour.

The first item on the task force agenda was whether or not to recommend a new $15.4 million contract between DHS and consulting group McKinsey and Co., which has been studying elements of the state’s Medicaid program.

DHS director John Selig said McKinsey has been working with the state to analyze Medicaid reforms.

“We think we are seeing real changes to the system,” Selig said.

He noted that every percentage point in growth in the state’s Medicaid expenses could cost $50 million in new funding. In previous years, Arkansas’ Medicaid program has seen 6-10% growth.

“What we have seen in growth rate over the past two years is 1% and 2.5%,” Selig said. “The difference between 2% growth and 7% growth over the last few years has been about a billion dollars.”

The Stephen Group, which is consulting the Health Reform Task Force, recommended going forward with the McKinsey contract.

The contract will be reviewed by the Arkansas Legislative Council on Friday. The Council is the interim body that provides legislative oversight when lawmakers are not in session.

While asking myriad questions about the need for the $15.4 million contract, Arkansas legislators pivoted the discussion into DHS’ ability to manage multiple contracts and where they are in the completion process.

“Are we set up today in the best, most efficient manner?” asked Sen. David Sanders, R-Little Rock.

“There needs to be overall coordination in Medicaid… so that we’re not paying for duplication,” said Sen. Missy Irvin, R-Mountain View. “That’s pertinent to what this task force ought to be doing.”

The task force voted to recommend Legislative Council approve the McKinsey contract.

In other task force business, DHS provided an update on Medicaid Eligibility System and Verification.

Task force co-chairman Sen. Jim Hendren, R-Sulpher Springs, said there would be two back-to-back meetings in July to review data tied to Medicaid and the Payment Improvement Initiative, a program started by Gov. Mike Beebe to create “episodes of care” to control Medicaid costs.

Hendren said the task force would also study how prescription medication is administered through Medicaid with an angle toward savings and a presentation on cost data tied to the Private Option. In August, Hendren said the task force would focus on long-term care.

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On Oct. 1, the coding system used by Arkansas medical providers for billing insurance companies and the government will change. Many providers probably won’t be ready, and if they aren’t, they will have trouble getting paid.

The federal government is requiring medical providers, including 38,000 in Arkansas, to switch from the ICD-9 system to ICD-10. Those who submit bills using ICD-9 after Sept. 30 will have their claims rejected, said Tami Harlan, deputy director of the state’s Medicaid program.

The number of Arkansans approved as eligible to enroll in the state’s expansion of Medicaid, known as the private option, has surpassed 250,000 people. That’s an upward tick of 8,696 people deemed eligible from March 31st to April 30th.

A section of the Affordable Care Act – called a 1332 waiver – is being hailed by one of the legislative architects of the private option and the director of the Arkansas Health Insurance Marketplace Board as a path toward consensus in a Legislature riddled with uncertainty over healthcare.